If Parks Canada spends money on promoting the use of national parks as perfect sites for a summer vacation, then motels, campgrounds, and other tourist attractions in the private sector may become less attractive to consumers. If, as a result of the promotion, consumers spent more money on trips to the national parks and less money in the private sector for their vacations, what would have occurred?
A) deficit spending
B) phasing out
C) crowding out
D) public-sector inflation

Question

Quizplus · Accepted Answer

Crowding out occurs when government spending or promotion reduces private sector activity by attracting more consumers to public sector offerings. In this case, the promotion of national parks could result in decreased spending on private sector vacation accommodations and attractions, leading to crowding out. Neither deficit spending, phasing out, nor public-sector inflation accurately describes the situation.

If Parks Canada Spends Money on Promoting the Use of National